The Naval Air Weapons Station at China Lake in California will get the first photovoltaic system installed under a new regulation that allows military installations to sign power-purchase agreements (PPAs) for up to 30 years. Under the agreement, the China Lake station is expected to reap $13 million in savings because of the 13.8-megawatt PV array that’s being installed under a 20-year PPA with MetLife.

SunPower is designing and building the system, using its Oasis Power Plant modular power block system, which consists of its E19 modules and T0 Tracker system. Construction of the array is slated to begin next month. Once complete, SunPower will operate and maintain (O&M) the array over the duration of the contract.

A MetLife affiliate will own the plant that will be leased to a SunPower affiliate.

“The arrangement with MetLife was structured as sale-leaseback, which is very common in the financing of commercial solar projects,” said Karen Butterfield, federal accounts director at SunPower. “It allows Met Life to capture the necessary tax credits and incentives as the project’s owner, which would have otherwise been stranded if the system was owned by the federal government, which doesn’t qualify for the tax incentives. The sale-leaseback structure also allows SunPower to stay directly involved in the project by offering O&M and monitoring services over the term of the contract.”

Under the PPA, the weapons station will receive energy at rates lower than the current retail rate of electricity, according to Butterfield.

“The PPA rate for the 13.78-MW solar project is below the current commercial rate offered by Southern California Edison, the utility serving the China Lake area,” said.

Previously, most projects with the government were limited to 10-year terms, which put project developers at higher-risk and made such agreements more expensive.

SunPower said the terms of the 20-year PPA will secure electricity at up to 30 percent below the rate of a traditional 10-year PPA.

The new statute, 10USC 2922a, allows longer energy contract terms for the military.

“The 2922a authority is a statute that allows federal agencies to enter into energy-related contracts up to 30 years in length, and does not require any special contracting arrangements,” Butterfield said. “The long term contracting authority allowed under 2922a solves one of the major hurdles in the development of large scale solar projects for the Department of Defense. This project provides a template for other installations interested in pursuing a long term PPA contract and should allow for faster implementation of future projects.”

The company already is working on other potential projects with the government, according to Butterfield.

“SunPower is pursuing several opportunities to use the precedent-setting 2922a authority to pursue large-scale projects that help the government meet their EPACT mandates, reduce their reliance on fossil fuel resources, improve national security and provide a hedge against rising electricity costs,” she said.

Image courtesy of SunPower.